The following companies have all signed deals with Alliacense to license both the MMP, and another of TPL's licensing portfolios.

• Lexmark
• Royal Phillips
• Bosch
• Asustek
• Smith & Nephew
• TPV Technology
• Sony? (I list ? because Sony is listed on Alliacense's website ONLY for MMP)

It would seem obvious from this overlap, and with Alliacense licensing both portfolios, that there is the clear possibility of a conflation of the expenses generated to license the MMP to these companies and those generated to license the CORE Flash or Fast Logic portfolios to them.

With that in mind, and with TPL the beneficiary of reimbursement from PDS for all expenses presented (some accounted for and some not per the agreement), it would be fiduciarily incumbent on PTSC, its managers and directors to verify all of the expenses reimbursed to TPL for their prosecution of the MMP licensing, and to assure that those expenses are in fact singularly applicable to MMP work, and not conflated with other licensing efforts.

I believe the industry standard mechanism for such verification is through an independent audit. As stewards and trustees of the public company PTSC, bound by a requirement to execute with fiduciary responsibility on behalf of the shareholders, it would seem to me to be a breach of that fiduciary responsibility if in fact no audits have been completed at the directon of PTSC and its audit committee, and/or if no regular auditing of those expenses is conducted.

I've asked this quesiton to PTSC by e-mail in the past with no response provided. IMO, this singular issue, if no audit at all and if no regular audits have been completed, is enough to challenge the BOD members, and especially the audit committee members, considering the magnitude of the MMP revenues, the fact that it is essentially the only substantial revenue source for PTSC.

Has anyone else ever asked and received an answer on whether PTSC verifies TPL expenses through an independent audit? Do others agree with this perspective from strict legal standard of "fiduciary responsibility"? If annual audits are performed (independent and directed by PTSC), then I would be satisfied that they are doing their job in this regard.

I thnk there are other aspects of the Master Agreement, the Commercialization Agreement and the PDS Operating Agreement, that when considering the constraints it puts on PTSC with respect to reporting, and control it abdicates, seem to tread a fine line as to whether they are in compliance with regulations controlling public companies.

Just a couple of aspects that we could pursue reviewing under the contemplated arrangements being discussed. I think with some effort at outlining concerns, we can help target the efforts of any counsel hired to streamline and focus their efforts.